Nigeria’s Power Sector Secures $2bn in Fresh Investment as Federal Government Slashes Inherited Liabilities by 93%

Minister Adelabu reveals a 93% cut in power sector liabilities and $2bn in new investment. Read how the Electricity Act 2023 is transforming Nigeria's energy.

By: AXL Media

Published: Mar 26, 2026, 11:26 AM EDT

Source: The information in this article was sourced from The PUNCH

A Milestone in Debt Reconciliation and Financial Stability

The Federal Government has achieved a significant breakthrough in de-risking the nation’s power sector by successfully slashing inherited liabilities. Speaking at the inauguration of the new Nigeria Electricity Liability Management Company (NELMCO) headquarters in Abuja, Minister of Power Adebayo Adelabu revealed that liabilities were reduced from a staggering N2.303tn to just N146.76bn. This 93% reduction was achieved through rigorous verification and reconciliation processes that saved the government over N700bn. These efforts have directly addressed the liquidity crisis that has historically deterred private participation, creating a more transparent financial framework for the electricity value chain.

Attracting Global Capital Through Market Liberalization

The successful implementation of the Electricity Act 2023 has acted as a catalyst for a new wave of international investment. Minister Adelabu disclosed that the sector has attracted over $2bn in fresh investments over the past year. By decentralizing the electricity market and allowing for subnational participation, 16 state electricity markets have already been activated. This shift toward a liberalized market has not only stimulated competition but also resulted in a 70% growth in sector revenue for 2024. The influx of capital is being directed toward upgrading aging infrastructure and transitioning the industry to full commercialization.

Closing the Metering Gap and Expanding Grid Capacity

To address the persistent issue of estimated billing, the Federal Government is leveraging the Presidential Metering Initiative. This program is currently backed by N700bn mobilized through the Federal Account Allocation Committee (FAAC) and an additional $500m facility from the World Bank. The goal is to deliver millions of meters nationwide, ensuring that consumers pay only for the energy they consume. On the operational front, generation capacity has seen a modest rise from 13GW to 14GW, with a recent peak generation record of 5,801.44MW. While these figures indicate progress, the Minister acknowledged that infrastructure challenges during the dry season continue to test the system's limits.